It wasn’t immediately obvious how they would be able to secure the funding for such an ambitious purchase, admits Mr Bastable. And following several years of punitive returns for the dairy herd in particular, coupled with an uncertain future for farming in a post-Brexit Britain, the family had to think seriously about whether the purchase was a risk worth taking.

But as Mr Bastable explains, the family has a long and rich history on the estate and ambitious plans for the future, and they realised that chances like this don’t come along very often.

“My family have been tenants on the Hall Place Estate for 98 years,” he says. “My grandfather Harry Hobbs came up from Somerset in 1919 because he found it difficult to sell milk in the West Country amid so much competition. But found he could in Kent with the London market so close – you couldn’t ship liquid milk far in those days.

“When he took on the tenancy for the 200 acre Leigh Park Farm on the estate he had 40 cows consisting of every breed under the sun. The milk went up to London each day in churns from the local station at Hilldenborough.”

As the other farms on the estate came vacant, the family expanded their tenancies until the 1980s when they were farming the whole estate of 1,200 acres, comprising a large arable acreage and 150 cows across three dairy herds.

By the end of the 80s, the Bastable family made the decision to consolidate the three dairy herds into one at Leigh Park. Now, nearly 40 years later, they have 450 pedigree Holsteins on the farm with complementary enterprises of maize and Italian Ryegrass for forage, and milling wheat for the local Weald Granary. The estate has also developed some of the redundant farm buildings as business units for let.

The opportunity to buy the farms arose unexpectedly last year and the Bastable family were in a strong position. “We were in Agricultural Holdings Act tenancies with succession rights at Leigh Park and another farm, with two successions to come; the other land had Farm Business Tenancies in place. That may have played a part in putting off prospective buyers from purchasing the estate as a whole so we decided to make an offer for the two farms with secure tenancies totalling 500 acres with a farmhouse, four cottages and farm buildings.”

To the family’s delight the landlords accepted their offer – so next came the problem of funding. The family had approached several lenders, but had quite exacting requirements to fulfil including a combination of long term fixed rate borrowing, some shorter term variable loans, and a split between interest-only and capital repayment.

“It might seem overly complicated, but we wanted to make sure we were able to service the loans,” says Mr Bastable. “The borrowing had to be structured to fit in with business plans over the next couple of decades and luckily one lender – AMC – was able to offer the flexibility, term length and mix of borrowing we needed.

“While competitive rates were important, the flexibility and understanding of what we were trying to do was also paramount. Low interest rates made buying much more attractive but the discount of being a sitting tenant put the purchase within reach.”

With the deal sealed and the first loan repayments leaving the bank account, Mr Bastable explains that they are already expanding the herd. The family has also started processing some of their milk into cheese and ice-cream – they make two hard cheeses, mature Charcott after the local village and the milder Penshurst, and are experimenting with soft cheese for quicker turnaround.

“We’re enjoying the diversity,” says Mr Bastable. “My wife Heather and I have five children, four daughters and a son, and we’re lucky that all are involved in the business. Now, with our home farm in our ownership, the future possibilities are endless. We were extremely fortunate to have the expertise of Tom French of BTF Rural who ensured the deal went as smoothly as possible and acted as our introduction to AMC.”

The expert view

Jon Drew, AMC’s manager for the South East, says opportunities for tenants to buy their farm are on the rise, facilitated by a combination of low interest rates and a perception among landowners that farmland values may have plateaued.
He says: “The rise in farmland values over the past decade has in many cases not been matched by increased rental income – particularly on older succession tenancies – and as such landlords now see a poorer return on the capital invested.

“So some landowners could be tempted to cash in their land – and this is giving sitting tenants the opportunity to negotiate a good discount whilst having access to borrowing at on-going low interest rates.”

He adds that while tenants often look to repay loans as quickly as possible, borrowing over as long a period as they can will minimise monthly commitments.

“Alternatively, some could borrow on an interest-only basis and repay lump sums as and when it suits them best. Fixed rate borrowing for as long as 30 years is also still available, on repayment or interest-only terms. Overall, flexibility and understanding of farming on the part of the lender is critical.”

Tom French of BTF Partnership based at Challock near Ashford advised the Bastables during their purchase. He says the level of discount a tenant can achieve below vacant possession depends on a number of factors, but fundamentally it’s the type and terms of the tenancy which make the biggest difference

“In the case of the Bastables, with both succession tenancies and Farm Business Tenancies lotted up by the selling agents, serious consideration was given as to which areas should be the priority for the family business.

“Succession tenancies i.e. those granted prior to July 1984, produce the greater discount as the vacant possession value is deferred for a longer period and with residential properties included it was agreed the priority was to secure the ‘home farm’.”

Mr French says there are a number of ways to arrive at a value for the asset when there are tenancies involved. One would be to calculate what an investor would pay – in simple terms, deferring the vacant possession value and capitalising the rental income for that period.

“As a protected tenant, he or she should be able to justify ‘one extra bid at auction’ over that of an investor, as the tenant could then sell the next day with vacant possession,” explains Mr French.

“However, another way is to split the vacant possession premium i.e. split the difference between an ‘investor’ bid and the vacant possession value, but at the end of the day the bid made has to be acceptable to the seller. I’m delighted that we found the ‘right’ value and that the Bastables can now confidently plan for the next generation.”

Pictured: The Bastable family (L to R) Wendy, Jill, David, Heather, Colin, Kate and Ruth